The Carbon Tax – Inflation Correlation

Start saving now for the high cost of the “Save Our Future Act”

Corporate Pollution Punishment…stocks could drop 20%-60%

Harold James: “We no longer live in a NICE world” (Non-Inflationary Continuing Expansion)

The McAlvany Weekly Commentary

with David McAlvany and Kevin Orrick

The Carbon Tax - Inflation Correlation

July 6, 2021

“With higher carbon taxes and a broader scope of application again, scope one, two, and three, you pay for someone else’s misdeeds, you pressure equity prices lower to levels of say 40% to 60% less than they are today. And in case you’re wondering about unintended consequences, you’ve got the baby boomer generation looking at 201k’s instead of 401k’s in that case, and what is the response? They vote for more governmental supplements and a bigger retirement safety net.”  - David McAlvany

Kevin: Welcome to The McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany.

Well, David, I’m just back from California, my son got married.

David: Unbelievable. This is, all of your kids now married. Congratulations.

Kevin: Yeah. He was born two years after I started working here with your family. And now he actively works here.

Something really struck me, I was talking to my wife as I was flying home. And all through Northern California, we went up to Sonoma, we went out on a boat for whale-watching. One of the things that I noticed this time around is, even though restaurants are having a hard time getting enough help, there were many, many Orientals, people who obviously weren’t born here, that were really working hard.

There was a particular Uber driver, my daughter and I had just gone out to eat and got an Uber. And this man was from China, originally. And we asked about his kids, we got talking. He was a hard-working man. He had like 22,000, 23,000 Uber rides. And he said, “Well this is my first son, and he’s a Harvard Medical School graduate.” And then he showed us the other two pictures, and both of the other kids were doctors, and I was so impressed with the hard-working ethic of people who’ve come in and recognized— maybe they’ve recognized American exceptionalism. But it comes from people who are willing to come in from the outside and work those extra hours.

David: I spent the weekend reading Francis Fukuyama’s book The Demand for Dignity and the Politics of Resentment. And there was a couple of things that complement what you’re saying both in terms of the expansion that we’ve seen in terms of global output between 1970 and 2008. The world’s output of goods and services quadrupled. A lot of that happened in the developing world. What Fukuyama is getting at is that a lot of the growth that we’ve seen in recent centuries has happened in the developing, not the developed world, which is, I think, one of the reasons why he sees some resentments brewing.

But one of the things he also points out, as I got a little later into the book section on nationalism, he looks at one particular academic, Ferdinand Tony is in this shift from the village community to urban society, where you see this mass migration within a country. And it sets up for a very interesting nationalistic expression.

I couldn’t help but think about a 21st-century iteration of this, like a 21st century time bomb of Chinese nationalism, where, again, we had it in Europe, where Europeans during the 19th century, due to rapid industrialization and migration, had this similar type thing. And you’ve got the same thing happening now, both within China and Vietnam, the move from the village to the urban setting. And again, they’re moving for opportunity. And as you describe this gentleman, even moving across the world for opportunity, and the second generation already stepping into that opportunity in a massive way, in a way that frankly, I wonder if your average American realizes how much opportunity th...